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February 6, 2023

SF House Market Report: January 2023

1100 Holloway Exterior

January started out quietly, but picked up speed around the middle of the month with the return of offer dates and multiple offers on many single-family homes. Qualified buyers suddenly jumped into the market, making those offers despite the latest interest rate hike. Median price and volume were down, reflecting (typically) low-key holiday activity.

Here’s the latest on how the house market did in January:

Median price: $1,351,000, a year-over-year slide of 20.6%.

Volume check: 93 houses closed last month—a 25% year-over-year drop.

The overbidding was tempered, with a few major exceptions. 40 homes changed hands for more than the list price, with nine closing for 20% or more over asking. Prize for the largest overbid went to 1100 Holloway in Ingleside Terrace (photo above courtesy Berkshire Hathaway-Franciscan). The “vintage” three-bedroom Edwardian on a large corner lot with no garage was listed super low at $1,098,000 and was sold through probate with court confirmation. Final sale price? $1,870,000—a whopping 70% over asking.

There were significant underbids. Holiday buyers were out wrapping up deals for themselves. Eleven houses sold for well under their original list prices, mostly because they had challenges like being tenant occupied or having list prices that were wildly ambitious in a market driven by higher interest rates. Two examples:

110 Scotia Exterior

110 Scotia was a large Silver Terrace home with dated finishes, tenants and a “dog in the backyard.” Initially listed in April 2022 for $1.7M, the sale closed last month for $1,110,000 (photo courtesy Coldwell Banker Realty).

And let’s not forget 164 24th Avenue at Lake:

164 24th Avenue Living Room

This 4057 sq ft 3BR vision in white hit the market in late August 2022 for $5,280,000 and closed for $3,930,000 (Photo courtesy Andersen, Jung & Co.).

Luxury buyers checked out for the holidays. Only six homes sold in the $3M+ range at an average of 48 days on the market.

Current mood: Excited. The underpricing strategy returned in full force in mid January, with some homes attracting ten or more offers—a change from the past few months were “offers as they come” became more common. We’re seeing low inventory in San Francisco; potential sellers are staying put with mortgages that carry comparably lower interest rates than what they could get in today’s loan landscape were they to trade up.  Minimal inventory means that buyers are all gravitating to the same homes.

Pro Tips
Stick with the list-low strategy if you’re planning to go on the market with a home that’s in a good location and has wide buyer appeal.

Buyers: The remodeled house listed for $1.3M in a great neighborhood location will likely sell for much, much more. Know the values in the particular areas in which you’re house hunting so you can gauge whether making that offer is worth your time.

[All data courtesy of the San Francisco Multiple Listing Service.]

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